General Motors (GM) will invest in Chinese self-driving startup Momenta, as it looks to catch up with China’s Nio (NIO) and Xpeng Motors (XPEV) whose “smart” electric cars are resonating with local consumers. GM stock rose.
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On Thursday, GM announced a $300 million investment in Momenta, ramping up on next-gen vehicle technologies.
“Customers in China are embracing electrification and advanced self-driving technology faster than anywhere else in the world,” Julian Blissett, president of GM China, said in a news release. In the U.S., General Motors already owns a majority stake in Cruise, a self-driving car company.
GM promised to announce launch timing for self-driving technologies in China “closer to production.”
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China’s Nio, Xpeng Boast ‘Smart Car’ Edge
In China, General Motors and Ford (F) have seen Chinese EV startups steal a march on so-called “smart cars.” Nio and Xpeng continue to see a sales boom this year after a blockbuster 2020.
Both Nio and Xpeng tie their success to their EVs’ advanced driver-assist and semi-autonomous features, sought after by China’s vast and fast-growing middle class.
More critically, Nio and Xpeng are poised to bring their most high-tech vehicles yet to market. Set to arrive in early 2022, Nio’s ET7 electric sedan will be its first autonomous driving model, the company says.
And arriving next month, Xpeng’s P5 electric sedan will offer “the strongest advanced driver assistance hardware system to date,” the company says. Both the ET7 and P5 use Lidar, an advanced safety technology that Tesla (TSLA) rejected.
Chinese internet giant Baidu (BIDU) also has developed a self-driving software and hardware system, called Apollo. It plans to sell that system to other automakers. And with new EVs such as the EA1, Chinese EV giant BYD (BYDDF), too, is ramping up on highly autonomous, electric cars.
Meanwhile, GM is making big self-driving strides at home, with its majority-owned Cruise unit testing L4 driverless vehicles in San Francisco.
On Friday, Tesla will release Full Self Driving Beta 10.1, which will be opened up quickly to all beta-test drivers who can show seven days of safe driving, CEO Elon Musk says. But Tesla tells regulators that Autopilot and FSD are Level 2 systems that require drivers to have their hands on the wheel and ready to take over at any moment.
GM Stock Gains
Shares of General Motors rose 1.8% to 51.57 in Thursday’s stock market. But GM stock remains under the 10-week and 40-week moving averages with no buy point in sight, according to MarketSmith chart analysis.
Among other EV stocks, Nio edged higher by 0.1%, Xpeng fell 2.3%, BYD declined 3.2% and Tesla ticked up 0.1%.
Through 2025, GM is investing $35 billion to develop EV and AV technologies. By 2025, General Motors plans to sell more than a million electric cars around the world each year. By 2035, it plans to only produce electric vehicles.
GM quickened its shift to EVs after President Joe Biden pushed a climate-friendly agenda.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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